Ex 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made as of the 9th day
of September, 2005, by and among SECURED SERVICES, INC., a Delaware corporation
(the "COMPANY"), having its principal place of business at 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, on the one hand, and XXXXXX XXXXXXX, residing at
0000 Xxx Xxxxxxx Xxxx, Xxxxxx, XX 00000 (the "EXECUTIVE"), on the other.
W I T N E S S E T H
WHEREAS, the parties desire by this Agreement to set forth the terms
and conditions of the employment relationship between the Company and the
Executive; and
WHEREAS, the terms of this Agreement have been approved by the Board of
Directors of the Company.
NOW, in consideration of the foregoing and the mutual covenants in this
Agreement, the Company and the Executive agree as follows:
1. EMPLOYMENT AND DUTIES. The Company hereby employs the Executive as
President and Chief Executive Officer on the terms and conditions provided in
this Agreement and Executive agrees to accept such employment subject to the
terms and conditions of this Agreement. The Executive shall be responsible for
the overall management and operations of the Company, shall perform the duties
and responsibilities as are customary for an officer of a corporation in such
positions, and shall perform such other duties and responsibilities as are
reasonably determined from time to time by the Company's Board of Directors (the
"BOARD"). The Executive shall report to and be supervised by the Board. The
Executive shall be based at the Company's planned new office in Northern
Virginia or such other place which shall be within a 30 mile radius thereof that
shall constitute the Company's headquarters and, except for business travel
incidental to his employment under this Agreement, the Company agrees the
Executive shall not be required to relocate. The Executive agrees to devote
substantially all his attention and time during normal business hours to the
business and affairs of the Company and to use his reasonable best efforts to
perform faithfully and efficiently the duties and responsibilities of his
positions and to accomplish the goals and objectives of the Company as may be
established by the Board. Notwithstanding the foregoing, the Executive may
engage in the following activities (and shall be entitled to retain all economic
benefits thereof including fees paid in connection therewith) as long as they do
not interfere in any material respect with the performance of the Executive's
duties and responsibilities hereunder and, with respect to subsections (i) and
(ii) below, that such activity is pre-approved by the Company's Chairman of the
Board: (i) serve on corporate, civic, religious, educational and/or charitable
boards or committees, provided that the Executive shall not serve on any board
or committee of any corporation or other business which competes with the
Business (as defined in Section 10(a) below); (ii) deliver lectures, fulfill
speaking engagements or teach on a part-time basis at educational institutions;
and (iii) make investments in businesses or enterprises and manage his personal
investments; provided that with respect to such activities Executive shall
comply with any business
conduct and ethics policy applicable to employees of the Company, including but
not limited to the Company's Black-Out Xxxxxxx Xxxxxxx Policy and Amendment for
Executives and Officers.
2. TERM. The term of this Agreement shall commence on September 12,
2005 (the "COMMENCEMENT DATE"), and shall terminate on October 1, 2006, unless
extended or earlier terminated in accordance with the terms of this Agreement
(the "TERMINATION DATE"). Such term of employment is herein sometimes referred
to as the "EMPLOYMENT TERM". The Employment Term shall be extended for
successive one-year periods unless either party notifies the other in writing at
least 90 days before the Termination Date, or any anniversary of the Termination
Date, as the case may be, that he or it chooses not to extend the Employment
Term.
3. COMPENSATION. As compensation for performing the services required
by this Agreement, and during the term of this Agreement, the Executive shall be
compensated as follows:
(a) BASE COMPENSATION. The Company shall pay to the Executive
an annual salary ("BASE COMPENSATION") of TWO HUNDRED THOUSAND DOLLARS
($200,000.00), payable in equal installments pursuant to the Company's customary
payroll procedures in effect for its executive personnel at the time of payment,
but in no event less frequently than monthly, subject to withholding for
applicable federal, state, and local income and employment related taxes. The
Executive may be entitled to such increases in Base Compensation with respect to
each calendar year during the term of this Agreement, as shall be determined by
the Company's Compensation Committee (the "COMMITTEE"), in its sole and absolute
discretion, based on an annual review of the Executive's performance.
(b) INCENTIVE COMPENSATION. In addition to Base Compensation,
the Executive may be entitled to receive additional compensation ("INCENTIVE
COMPENSATION") of up to ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000.00)
based upon agreed upon milestones as set forth in Attachment A. For purposes of
this Agreement, the Executive's "PRO RATA SHARE" of Incentive Compensation for
any calendar year of the Company shall be a fraction whose numerator shall be
equal to the number of months during which the Executive was actually employed
by the Company during any such calendar year and whose denominator shall be the
total number of months in such calendar year.
(c) STOCK OPTIONS. The Company, simultaneous with the date of
this Agreement, shall grant to the Executive an option to purchase ONE MILLION
SIX HUNDRED THOUSAND (1.6 million) shares of Common Stock of the Company
pursuant to the Secured Services, Inc. Incentive stock Option Plan. The exercise
price per share shall be the fair market value of one share on the date of
grant. The option term shall be four years. Such option shall vest at the rate
of 25% after one year from the Commencement Date and 2.08% each month
thereafter.
4. EMPLOYEE BENEFITS. During the Employment Term and subject to the
limitations set forth in this Section 4, the Executive and his eligible
dependents shall have the right to participate in any retirement plans
(qualified and non-qualified), pension, insurance, health, disability or other
benefit plan or program that has been or is hereafter adopted by the Company (or
in which the
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Company participates), according to the terms of such plan or program, on terms
no less favorable than the most favorable terms granted to senior executives of
the Company.
5. VACATION AND LEAVES OF ABSENCE. The Executive shall be entitled to
the normal and customary amount of paid vacation provided to senior executive
officers of the Company. Vacation days that are not taken in a given calendar
year shall accrue and be carried over to the next Calendar year up to a maximum
of ten days. Upon any termination of this Agreement for any reason whatsoever,
accrued and unused vacation will be paid to the Executive within 10 days of such
termination based on his annual rate of Base Compensation in effect on the date
of such termination. In addition, the Executive may be granted leaves of absence
with or without pay for such valid and legitimate reasons as the Company in its
sole and absolute discretion may determine, and the Executive shall be entitled
to the same sick leave and holidays provided to other senior executives of the
Company.
6. BUSINESS EXPENSES. The Executive shall be promptly reimbursed
against presentation of vouchers or receipts for all reasonable and necessary
expenses incurred by him in connection with the performance of his duties
hereunder.
7. INDEMNIFICATION.
(a) GENERAL. The Company agrees that if the Executive is made
a party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "PROCEEDING"), by
reason of the fact that he is or was a director or officer of the Company, is or
was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including, without limitation, service with respect
to employee benefit plans, whether or not the basis of such Proceeding is
alleged action in an official capacity as a director, officer, member, employee
or agent while serving as a director, officer, member, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by applicable law (in accordance with the certificate of
incorporation and/or bylaws of the Company), as the same exists or may hereafter
be amended, against all Expenses (as defined below) incurred or suffered by the
Executive in connection therewith, and such indemnification shall continue as to
the Executive even if the Executive has ceased to be an officer, director or
agent, or is no longer employed by the Company and shall inure to the benefit of
his heirs, executors and administrators.
(b) EXPENSES. As used in this Section 7, the term "EXPENSES"
shall include, without limitation, damages, losses, judgments, liabilities,
fines, penalties, excise taxes, settlements and costs, attorneys' fees,
accountants' fees, and disbursements and costs of attachment or similar bonds,
investigations, and any expenses of establishing a right to indemnification
under this Agreement.
(c) SUBROGATION. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Executive.
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(d) PARTIAL INDEMNIFICATION. If the Executive is entitled
under any provision of this Agreement to indemnification by the Company for some
or a portion of any Expenses, but not, however, for the total amount thereof,
the Company shall nevertheless indemnify the Executive for the portion of such
Expenses to which the Executive is entitled.
(e) NOTICE OF CLAIM. The Executive shall give to the Company
prompt written notice of any claim made against him for which indemnity will or
could be sought under this Agreement. In addition, the Executive shall give the
Company such information and cooperation as it may reasonably require and as
shall be within the Executive's power and at such times and places as are
mutually convenient for the Executive and the Company.
(f) DEFENSE OF CLAIM. With respect to any Proceeding as to
which the Executive notifies the Company of the commencement thereof: (i) the
Company will be entitled to participate therein at its own expense; and (ii)
except as otherwise provided below, to the extent that it may wish, the Company
jointly with any other indemnifying party similarly notified will be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the
Executive. The Company shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of the Company or as to which
the Executive shall have reasonably concluded that there may be a conflict of
interest between the Company and the Executive in the conduct of the defense of
such action.
The Company shall not be liable to indemnify the
Executive under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not settle any
action or claim in any manner which would impose any penalty or limitation on
the Executive without Executive's written consent. Neither the Company nor the
Executive shall unreasonably withhold or delay their consent to any proposed
settlement.
(g) NON-EXCLUSIVITY. The right to indemnification conferred in
this Section 7 shall not be exclusive of any other right which the Executive may
have or hereafter may acquire under any statute, provision of the certificate of
incorporation or by-laws of the Company, agreement, vote of stockholders or
disinterested directors or otherwise.
(h) DIRECTORS AND OFFICERS LIABILITY POLICY. The Company
agrees to use reasonable efforts to maintain directors and officers liability
insurance covering the Executive in a reasonable and adequate amount determined
by the Board.
8. TERMINATION AND TERMINATION BENEFITS.
(a) TERMINATION BY THE COMPANY.
(i) FOR CAUSE. Notwithstanding any provision
contained herein, the Company may terminate this Agreement at any time during
the Employment Term for "Cause". For purposes of this subsection 8(a)(i),
"CAUSE" shall mean (1) A willful breach of any of the material obligations under
this Agreement, which breach shall not have been remedied by the Executive
within thirty (30) days after SSVC shall have given notice to him of such
breach; (2) willful and continued misconduct or gross negligence in performance
of the Executive's duties hereunder,
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including his refusal to comply in any material respect with the legal
directives of the Board or the authorized representative of the Board so long as
such directives are not inconsistent with the Executive's position and duties;
(3) dishonest or fraudulent conduct, your theft or other misappropriation of the
Company's proprietary information or property, a deliberate attempt to do an
injury to SSVC, or conduct that materially discredits SSVC or is materially
detrimental to the reputation of SSVC, including, but not limited to, conviction
of a felony; or (4) habitual absenteeism, chronic alcoholism or any other form
of addiction which impacts Executive's ability to perform his duties under this
Agreement. Termination pursuant to this subsection 8(a)(i) shall be effective
immediately upon giving the Executive written notice thereof stating the reason
or reasons therefor with respect to clauses (2), (3) or (4) above, and thirty
days after written notice thereof from the Company to the Executive specifying
the acts or omissions constituting the failure and requesting that they be
remedied with respect to clause (1) above, but only if the Executive has not
cured such failure within such xxxxx day period. In the event of a termination
pursuant to this subsection 8(a)(i), the Executive shall be entitled to payment
of his Base Compensation and the benefits pursuant to Section 4 hereof up to the
effective date of such termination and it is also the intention and agreement of
the Company that Executive shall not be deprived by reason of termination for
Cause of any payments, options or benefits which have been vested or have been
earned or to which Executive is entitled as of the effective date of such
termination.
(ii) DISABILITY. If due to illness, physical or
mental disability, or other incapacity, the Executive shall fail, for a total of
any six consecutive months ("DISABILITY"), to substantially perform the
principal duties required by this Agreement, the Company may terminate this
Agreement upon 30 days' written notice to the Executive. In such event, the
Executive shall be (1) paid his Base Compensation until the Termination Date and
his Pro Rata Share of any Incentive Compensation to which he would have been
entitled for the year in which such termination occurs, and (2) provided with
employee benefits pursuant to Section 4, to the extent available, for the
remainder of the Employment Term; PROVIDED, HOWEVER, that Base Compensation will
not be paid to the Executive pursuant to this subsection 8(a)(ii) for any period
where the Executive is receiving any payments from any policy of disability
insurance pursuant to Section 4 hereof.
(b) TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.
The Company may terminate the Executive's employment hereunder without Cause and
the Executive may terminate his employment hereunder for "Good Reason" (as
defined below). If the Company terminates the Executive's employment hereunder
without Cause, other than due to death or Disability, or if the Executive
terminates his employment for Good Reason, the Executive shall be paid: (i) his
Base Compensation at the rate in effect at the time of termination through the
Termination Date; (ii) his Base Compensation at the rate in effect at the time
of termination from the Termination Date to the end of the Severance Period (as
hereinafter defined); (iii) his Pro Rata Share of any Incentive Compensation to
which he would have been entitled for the year in which such termination occurs;
(iv) any deferred compensation (including, without limitation, interest or other
credits on the deferred amounts) and any accrued vacation pay; (v) continuation
until the expiration of the Employment Term, of the health and welfare benefits
of the Executive (as provided for by Section 4 of this Agreement) (or the
Company shall provide the economic equivalent thereof); provided, however, if
the Executive obtains new employment and such employment makes the Executive
eligible for health and welfare or long-term disability benefits, then the
Company shall no
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longer be required to provide such benefits to the Executive; and (vi) any other
compensation and benefits as may be provided in accordance with the terms and
provisions of any applicable plans or programs of the Company.
As used herein, "GOOD REASON" means and shall be deemed to
exist if, without the prior express written consent of the Executive, (a) any
failure by SSVC to comply with any provision of this Agreement other than an
isolated, insubstantial or inadvertent failure not occurring in bad faith; or
(b) the assignment to the Executive of any duties materially inconsistent with
the Executive's position (including status, title and reporting requirements),
authority, duties or responsibilities or any other action by SSVC which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial or inadvertent action not
taken in bad faith; or (c) the Company fails to use its commercially reasonable
efforts to maintain, or cause to be maintained directors and officers liability
insurance coverage for the Executive; (d) the Company purports to terminate the
Executive's employment for Cause and such purported termination of employment is
not effected in accordance with the requirements of this Agreement, or (e) a
Change in Control shall have occurred and the Company fails to obtain the full
assumption of this Agreement by a successor; provided, however, that with
respect to items (a) through (c) above, the Company has not cured, or commenced
to cure, such failure or breach within 30 days of written notice by the
Executive, and with respect to item (e) above, the Executive shall have provided
the Company with 180 days written notice of such termination.
For purposes of this Agreement, a "CHANGE OF CONTROL" shall
mean (1) any merger by the Company into another corporation or corporations
which results in the stockholders of the Company immediately prior to such
transaction owning less than 55% of the surviving Corporation; (2) any
acquisition (by purchase, lease or otherwise) of all or substantially all of the
assets of the Company by any person, corporation or other entity; (3) the
acquisition of beneficial ownership, directly or indirectly, of voting
securities of the Company (defined as Common Stock of the Company or any
securities having voting rights) and rights to acquire voting securities of the
Company (defined as including, without limitation, securities that are
convertible into voting securities of the Company (as defined above) and rights,
options warrants and other agreements or arrangements to acquire such voting
securities) by any person, corporation or other entity, in such amount or
amounts as would permit such person, corporation or other entity to elect a
majority of the members of the Board of the Company, as then constituted; or (4)
the acquisition of beneficial ownership, directly or indirectly, of voting
securities and rights to acquire voting securities having voting power equal to
25% or more of the combined voting power of the Company's then outstanding
voting securities by any person, corporation or other entity unless such
acquisition as is described in this part (4) is expressly approved by resolution
of the Board of the Company passed upon affirmative vote of not less than a
majority of the Board and adopted at a meeting of the Board held not later than
the date of the next regularly scheduled or special meeting held following the
date the Company obtains actual knowledge of such acquisition (which approval
may be limited in purpose and effected solely to affect the rights of Employee
under this Agreement). Notwithstanding the preceding sentence, (i) any
transaction that involves a mere change in identity form or place of
organization within the meaning of Section 368(a)(1)(F) of the Internal Revenue
Code of 1986, as amended, or a transaction of similar effect, shall not
constitute a Change in Control.
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(c) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided or maintained by the
Company and for which the Executive may qualify, nor shall anything herein limit
or otherwise prejudice such rights as the Executive may have under any other
existing or future agreements with the Company. Except as otherwise expressly
provided for in this Agreement, amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plans or programs of the
Company at or subsequent to the date of termination shall be payable in
accordance with such plans or programs.
(d) VESTING OF STOCK GRANTS AND STOCK OPTIONS. In the event of
any termination of this Agreement, Executive's rights with regard to any stock
grants, loan agreements or stock options shall be as set forth in the respective
agreement containing the terms and conditions pertaining thereto. If however the
termination is a result of a change of control as defined in subsection 8(b) AND
also qualifies as "termination for good reason" as defined in subsection 8(b),
then 100% of the unvested stock options would vest effective on the date of
termination.
(e) DEATH. Notwithstanding any other provision of this
Agreement, this Agreement shall terminate on the date of the Executive's death.
In such event the Company shall continue to pay to his estate the Pro Rata Share
of any Incentive Compensation to which Executive would have been entitled for
the year in which such death occurs.
(f) SEVERANCE PERIOD. If the Company terminates the
Executive's employment hereunder without Cause, other than due to death or
Disability, or if the Executive terminates his employment for Good Reason, the
Severance Period shall be six months.
(g) NO MITIGATION. The Executive shall not be required to
mitigate the amount of any payments provided for by this Agreement by seeking
employment or otherwise, nor shall the amount of any payment or benefit provided
in this Agreement be reduced by any compensation or benefit earned by the
Executive after termination of his employment.
9. COMPANY PROPERTY. All advertising, promotional, sales, suppliers,
manufacturers and other materials or articles or information, including without
limitation reports, customer lists, customer sales analyses, invoices, product
lists, price lists or information, samples, or any other materials or data of
any kind furnished to the Executive by the Company or developed by the Executive
on behalf of the Company or at the Company's direction or for the Company's use
or otherwise in connection with the Executive's employment hereunder, are and
shall remain the sole and confidential property of the Company; if the Company
requests the return of such materials at any time during or at or after the
termination of the Executive's employment, the Executive shall immediately
deliver the same to the Company.
10. RESTRICTIVE COVENANTS.
(a) COVENANTS AGAINST COMPETITION. The Executive acknowledges
that as of the execution of this Employment Agreement (i) the Company is engaged
in the business of providing Software for secure identity management
(Identiprise SECUREDUSER) and secure connection
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management (Identiprise SECUREDMOBILE) and associated consulting and
implementation professional services (the "BUSINESS"); (ii) the Company's
Business is conducted currently throughout the United States and Canada and may
be expanded to other locations; (iii) his employment with the Company will have
given him access to confidential information concerning the Company; and (iv)
the agreements and covenants contained in this Agreement are essential to
protect the business and goodwill of the Company. Accordingly, the Executive
covenants and agrees as follows:
(i) NON-COMPETE. Without the prior written consent of
the Board, the Executive shall not during the Restricted Period (as defined
below) within the Restricted Area (as defined below) (except in the Executive's
capacity as an officer of the Company or any of its affiliates), (a) engage or
participate in the Business; (b) enter the employ of, or render any services
(whether or not for a fee or other compensation) to, any person, corporation or
other entity engaged in the Business; or (c) acquire an equity interest in any
such person, corporation or other entitiy; provided, that during the Restricted
Period the Executive may own, directly or indirectly, solely as a passive
investment, securities of any company traded on any national securities exchange
or on the National Association of Securities Dealers Automated Quotation System.
As used herein, "RESTRICTED PERIOD" shall mean the
period commencing on the Commencement Date and ending on the second anniversary
of the Executive's termination of employment.
"RESTRICTED AREA" shall mean any place within the
United States and any other country in which the Company is then actively
considering conducting Business as of the Termination Date.
(b) CONFIDENTIAL INFORMATION; PERSONAL RELATIONSHIPS. The
Executive acknowledges that the Company has a legitimate and continuing
proprietary interest in the protection of its confidential information and has
invested substantial sums and will continue to invest substantial sums to
develop, maintain and protect confidential information. The Executive agrees
that, during and after the Restricted Period, without the prior written consent
of the Board, the Executive shall keep secret and retain in strictest
confidence, and shall not knowingly use for the benefit of himself or others all
confidential matters relating to the Company's Business including, without
limitation, operational methods, marketing or development plans or strategies,
business acquisition plans, joint venture proposals or plans, and new personnel
acquisition plans, learned by the Executive heretofore or hereafter (such
information shall be referred to herein collectively as "CONFIDENTIAL
INFORMATION"); provided, that nothing in this Agreement shall prohibit the
Executive from disclosing or using any Confidential Information (i) in the
performance of his duties hereunder, (ii) as required by applicable law, (iii)
in connection with the enforcement of his rights under this Agreement or any
other agreement with the Company, or (iv) in connection with the defense or
settlement of any claim, suit or action brought or threatened against the
Executive by or in the right of the Company. Notwithstanding any provision
contained herein to the contrary, the term Confidential Information shall not be
deemed to include any general knowledge, skills or experience acquired by the
Executive or any knowledge or information known or available to the public in
general. Moreover, the Executive shall be permitted to retain copies of, or have
access to, all such Confidential Information relating to any disagreement,
dispute or litigation involving the Executive.
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(c) EMPLOYEES OF THE COMPANY AND ITS AFFILIATES. Without the
prior written consent of the Board, the Executive shall not, during the
Restricted Period, directly or indirectly, hire or solicit, or cause others to
hire or solicit, for employment by any person, corporation or entity other than
the Company or any affiliate or successor thereof, any employee of, or person
employed within the two years preceding the Executive's hiring or solicitation
of such person by, the Company and its affiliates or successors or encourage any
such employee to leave his or her employment. For this purpose, any person whose
employment has been terminated involuntarily by the Company shall be excluded
from those persons protected by this Section for the benefit of the Company.
(d) BUSINESS RELATIONSHIPS. During the Restricted Period, the
Executive shall not, directly or indirectly, request or advise a person,
corporation or entity that has a business relationship with the Company to
curtail or cancel such business relationship with the Company.
(e) RIGHTS AND REMEDIES UPON BREACH. If the Executive
breaches, or threatens to commit a breach of any of the provisions contained in
Section 10 of this Agreement (the "RESTRICTIVE COVENANTS"), the Company shall
have the following rights and remedies, each of which rights and remedies shall
be independent of the others and severally enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity.
(i) SPECIFIC PERFORMANCE. The right and remedy to
have the Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company and that
money damages would not provide an adequate remedy to the Company.
(ii) ACCOUNTING. The right and remedy to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits derived or received by the
Executive as the result of any action constituting a breach of Restrictive
Covenants.
(f) SEVERABILITY OF COVENANTS. The Executive acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in duration and
geographical scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect without regard to the invalid portions. The
provisions set forth in this Section 10 shall be in addition to any other
provisions of the business conduct and ethics policies applicable to employees
of the Company and its subsidiaries during the term of Executive's employment.
(g) SAVING CLAUSE. If the period of time or the area specified
in subsection (a) above should be adjudged unreasonable in any proceeding, then
the period of time shall be reduced by such number of months or the area shall
be reduced by the elimination of such portion thereof or both so that such
restrictions may be enforced in such area and for such time as is adjudged to be
reasonable. If the Executive violates any of the restrictions contained in the
foregoing subsection (a), the restrictive period shall not run in favor of the
Executive from the time of the commencement of
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any such violation until such time as such violation shall be cured by the
Executive to the satisfaction of Company.
11. EXECUTIVE'S REPRESENTATION AND WARRANTIES. Executive represents and
warrants that he has the full right and authority to enter into this Agreement
and fully perform his obligations hereunder, that he is not subject to any
non-competition agreement other than with the Company, and that his past,
present and anticipated future activities have not and will not infringe on the
proprietary rights of others. Executive further represents and warrants that he
is not obligated under any contract (including, but not limited to, licenses,
covenants or commitments of any nature) or other agreement or subject to any
judgment, decree or order of any court or administrative agency which would
conflict with his obligation to use his best efforts to perform his duties
hereunder or which would conflict with the Company's business and operations as
presently conducted or proposed to be conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of the Company's business as
officer and employee by Executive will conflict with or result in a breach of
the terms, conditions or provisions of or constitute a default under any
contract, covenant or instrument to which Executive is currently a party.
12. MISCELLANEOUS.
(a) INTEGRATION; AMENDMENT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters set
forth herein and supersedes and renders of no force and effect all prior
understandings and agreements between the parties with respect to the matters
set forth herein. No amendments or additions to this Agreement shall be binding
unless in writing and signed by both parties.
(b) SEVERABILITY. If any part of this Agreement is contrary
to, prohibited by, or deemed invalid under applicable law or regulation, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited, or invalid, but the remainder of this Agreement shall not be invalid
and shall be given full force and effect so far as possible.
(c) WAIVERS. The failure or delay of any party at any time to
require performance by the other party of any provision of this Agreement, even
if known, shall not affect the right of such party to require performance of
that provision or to exercise any right, power, or remedy hereunder, and any
waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power, or
remedy under this Agreement. No notice to or demand on any party in any case
shall, of itself, entitle such party to other or further notice or demand in
similar or other circumstances.
(d) POWER AND AUTHORITY. The Company represents and warrants
to the Executive that it has the requisite corporate power to enter into this
Agreement and perform the terms hereof; that the execution, delivery and
performance of this Agreement by it has been duly authorized by all appropriate
corporate action; and that this Agreement represents the valid and legally
binding obligation of the Company and is enforceable against it in accordance
with its terms.
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(e) BURDEN AND BENEFIT; SURVIVAL. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, personal and legal representatives, successors and assigns.
(f) GOVERNING LAW; HEADINGS. This Agreement and its
construction, performance, and enforceability shall be governed by, and
construed in accordance with, the laws of the State of New York. Headings and
titles herein are included solely for convenience and shall not affect, or be
used in connection with, the interpretation of this Agreement.
(g) ARBITRATION; REMEDIES. Any dispute or controversy arising
under this Agreement or as a result of or in connection with Executive's
employment (other than disputes arising under Section 10) shall be arbitrated
and settled pursuant to the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association which are then in effect in a
proceeding held in New York City, New York. This provision shall also apply to
any and all claims that may be brought under any federal or state
anti-discrimination or employment statute, rule or regulation, including, but
not limited to, claims under: the National Labor Relations Act; Title VII of the
Civil Rights Act; Sections 1981 through 1988 of Title 42 of the United States
Code; the Employee Retirement Income Security Act; the Immigration Reform and
Control Act; the Americans With Disabilities Act; the Age Discrimination in
Employment Act; the Fair Labor Standards Act; the Occupational Safety and Health
Act; the Family and Medical Leave Act; and the Equal Pay Act. The decision of
the arbitrator and award, if any, is final and binding on the parties and the
judgment may be entered in any court having jurisdiction thereof. The parties
will agree upon an arbitrator from the list of labor arbitrators supplied by the
American Arbitration Association. The parties understand and agree, however,
that disputes arising under Section 10 of this Agreement may be brought in a
court of law or equity without submission to arbitration.
(h) JURISDICTION. Except as otherwise provided for herein,
each of the parties (a) submits to the exclusive jurisdiction of any state or
federal court sitting in New York, NY in any action or proceeding arising out of
or relating to this Agreement, (b) agrees that all claims in respect of the
action or proceeding may be heard and determined in any such court, (c) agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court and (d) waives any right such party may have to a
trial by jury with respect to any action or proceeding arising out of or
relating to this Agreement. Each of the parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety or other security that might be required of any other
party with respect thereto. Any party may make service on another party by
sending or delivering a copy of the process to the party to be served at the
address and in the manner provided for giving of notices in Section 12(i).
Nothing in this Section, however, shall affect the right of any party to serve
legal process in any other manner permitted by law.
(i) NOTICES. All notices called for under this Agreement shall
be in writing and shall be deemed given upon receipt if delivered personally or
by confirmed facsimile transmission and followed promptly by mail, or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at their respective addresses (or at such other address for a party as
shall be specified by like notice; provided that notices of a change of address
shall be effective only
11
upon receipt thereof) as set forth in the preamble to this Agreement or to any
other address or addressee as any party entitled to receive notice under this
Agreement shall designate, from time to time, to others in the manner provided
in this subsection 12(i) for the service of notices.
Any notice delivered to the party hereto to whom it
is addressed shall be deemed to have been given and received on the day it was
received; PROVIDED, HOWEVER, that if such day is not a business day then the
notice shall be deemed to have been given and received on the business day next
following such day. Any notice sent by facsimile transmission shall be deemed to
have been given and received on the business day next following the day of
transmission.
(j) NUMBER OF DAYS. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; PROVIDED, HOWEVER, that if the final day of any time
period falls on a Saturday, Sunday or holiday on which federal banks are or may
elect to be closed, then the final day shall be deemed to be the next day which
is not a Saturday, Sunday or such holiday.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
------------------------------------
XXXXXX XXXXXXX
SECURED SERVICES, INC.
------------------------------------
By: Xxxx Xxxxxx
Chairman
Board of Directors
12
APPENDIX A
SECURED SERVICES, INC.
INCENTIVE COMPENSATION
----------------------
1. PERIOD: October 1, 2005 through September 30, 2006
2. TARGET PAYOUT (All figures are at 100% achievement)
Total Annual : $ 125,000
a. Fund Raising:
i. Payout from Fund Raising Goal: $ 25,000
b. Financial Performance (year ending 9/30/06): $ 100,000
i. Payout from Revenue Goal: $ 75,000
ii. Payout from EBITDA Goal: $ 25,000
3. PAYMENT: Paid in arrears within 30 days of the end of each year.
4. FUND RAISING BONUS: All of the following criteria must be met for employee to
qualify for this bonus:
a. Minimum of $8,000,000 round
b. Terms of deal acceptable to 100% board of directors
c. Valuation must be greater than $40 million
5. FINANCIAL PERFORMANCE BONUS: To be measured at the end of the third quarter
2006 with 75% on Target Revenue and 25% on Target EBITDA (before Incentive
Compensation).
--------------- -------------------- --------------------
Target Revenue Target
EBITDA*
--------------- -------------------- --------------------
[$6,000,000] [($__________)]
--------------- -------------------- --------------------
* To be measured on EBITDA adjusted before any expense related to
variable accounting for stock option plans.
The Payout is then determined by determining the actual percentage achieved
against Plan for both Target Revenue and Target EBITDA (measured before
Incentive Compensation) and applying the following Payout Percentage to the
Target Payouts listed in #2 above.
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A. Payout against revenue targets shall use the following schedule:
-------------------------------- ----------------------------------------------
% OF GOAL % OF BONUS
-------------------------------- ----------------------------------------------
105% and above Same as % of Goal achieved times 1.25 up to
250% max.
-------------------------------- ----------------------------------------------
100%+ but less than 105% 100% - 105% (linear)
-------------------------------- ----------------------------------------------
95%+ but less than 100% 80%
-------------------------------- ----------------------------------------------
90%+ but less than 95% 50%
-------------------------------- ----------------------------------------------
Below 90% No Bonus
-------------------------------- ----------------------------------------------
B. Payout against EBITDA targets shall use the following schedule:
-------------------------------- --------------------------------------------
% OF GOAL % OF BONUS
-------------------------------- --------------------------------------------
125% and above Same as % of Goal achieved times 1.25 up
to 250% max. payout
-------------------------------- --------------------------------------------
100%+ but less than 125% 100% - 125% (linear)
-------------------------------- --------------------------------------------
95%+ but less than 100% 80%
-------------------------------- --------------------------------------------
90%+ but less than 95% 50%
-------------------------------- --------------------------------------------
Below 95% No Bonus
-------------------------------- --------------------------------------------
7. EMPLOYMENT REQUIREMENT: Executive must still be employed by the company at
the time of the payment, 10/31/06.
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